I was off by one letter. If you had told me a year ago that Shell was going to make one of the biggest acquisitions in energy industry history, I would have guessed the target was BP. Instead, Shell plunked down $70 billion for BG after a month of whirlwind talks that reportedly began with a Sunday afternoon phone call between the two top executives.
Royal Dutch Shell Plc hired Barclays Plc to help arrange a 10 billion pound ($15 billion) loan to help fund its purchase of BG Group Plc, two people with knowledge of the matter said. The short-term bridge facility will replace an existing 3 billion-pound loan provided by Bank of America Corp. on April 8, said the people, who asked not to be identified because the transaction is private. The loan will help fund the cash component of the purchase price, the people said.
Shell’s plans to cast off a number of North Sea assets will not be affected by its proposed £47billion “mega-merger” with BG Group, a Scottish oil and gas consultancy has said. The Anglo-Dutch oil giant last week said it plans to buy Reading-based BG in a deal that would be the second biggest deal of its kind after Exxon and Mobil’s £51billion tie-up in 1998. Analysts have said that the announcement could spark a rash of similar deals as companies look to consolidate against the backdrop of a low oil price environment.
Offshore giant Shell has been accused of breaking safety rules at its site at the huge St Fergus gas terminal. The Health and Safety Executive (HSE) has issued an improvement notice for the second time in just over a year after it emerged not enough was being done to prevent “major accidents” at the complex north of Peterhead. The HSE accused Shell of failing to take “all measures necessary” to identify tasks which had the potential to cause a “critical” situation.
Oil giant Shell has played down concerns that its £47billion proposed “mega-merger” with BG Group will lead to hundreds of further job cuts in the North Sea. Sources have claimed that up to 300 jobs are set to be cut in Aberdeen as the two firms plan to join forces and trim £1.6billion in costs annually. Shell is currently negotiating to cut at least 250 staff and agency contractors from its 4,500-strong North Sea workforce. Combined, BG and Shell will employ 5,500 people in the region and be the biggest oil and gas producer on the UK Continental Shelf. A further 300 jobs would amount to a 10% drop in employee numbers between the two firms. A spokeswoman for Shell said she did not “recognise” the 300 jobs figure, but pointed to chief executive Ben van Beurden’s admission that there are “of course going to be synergies” if the deal goes ahead.
BP Plc coined the slogan “Beyond Petroleum.” The new industry mantra might be “Beyond Oil and Into Gas.” Oh, and while we’re at it, “Down With Coal.” Consider Royal Dutch Shell Plc’s recent $70 billion acquisition of BG Group Plc -- clearly a huge bet that natural gas will prove to be its cash cow of the future. The petroleum industry’s move toward gas is hardly new -- the hydraulic fracturing shale revolution is in its second decade, after all. Still, Shell’s move is an emphatic confirmation that some among the Big Oil family firmly believe gas will play a growing role in meeting the energy demand of emerging countries such as China and India that are trying to move away from dirtier coal.
Royal Dutch Shell Plc says its proposed $70 billion takeover of BG Group Plc will boost dividends and share buybacks for investors. North Sea workers in fear of their jobs after a collapse in oil prices will hope they’re as lucky. Shell, employing about 2,400 across the North Sea, targets $2.5 billion of pretax “synergies” a year across the globe from the deal, including staff cuts. “There are no guarantees in life,” said Chief Executive Officer Ben Van Beurden, asked if the deal would lead to cuts in the U.K. “Irrespective of what happens, we will have to look at how we make the North Sea a strong and healthy province again.” Even before the latest plans, The Hague-based company said March 26 that about 250 positions would go in Aberdeen, the Scottish city at the center of the U.K. oil and gas industry. “We expect synergies globally, which would include job reductions and office consolidation,” Kayla Macke, a Shell spokeswoman, said Wednesday in an e-mailed reply to questions. Details will be provided later, she said.
Ah, I’ve been waiting for this to happen ... the mega-mergers derby to begin, the starting gun being the current oil price slump. And it turns out to be Shell that got out of the gate first, which might surprise a few stock market pundits who know far more than ever I will about deal making or indeed horse making form than I ever will. However, unless you count the company’s $4.5-5billion takeover of Enterprise Oil in 2002, then Shell was conspicuously absent from the Mega-mergers Cup Race sparked by the late 1997 through 1999 oil price slump that sparked consolidation among a crop of listed Western oilcos and big supply chain brands. Naturally, there’s been a heap of punditry spewed so far as a result of Shell deciding that it wants to pick off BG Group. However, even I can see a number of good reasons for this particular deal, particularly on the assets portfolio front. And so-on and so-forth.
BG boss Helge Lund is set to enjoy a bumper pay package that could be worth more than £20 million, despite agreeing to a takeover just two months into the job. Mr Lund is likely to stay on until the completion of the deal, expected to take about a year, which will see the exploration firm swallowed up by Royal Dutch Shell. The scale of his planned remuneration caused an outcry last year before it was trimmed slightly and pegged to stringent performance criteria by the company as it sidestepped a potential shareholder revolt.
Shell has sought an injunction against Greenpeace activists after Arctic drilling protesters boarded an oil rig in the Pacific. Half a dozen Greenpeace members had approached the rig, the Polar Pioneer, in inflatable boats and scaled the platform. The Transocean-owned rig is being sent on a vessel called the Blue Marlin to Seattle before heading to the Arctic, according to Greenpeace.
Shares in BG Group have risen by more than a third after it was revealed the company was in talks with oil major Shell. The deal, which broke last night, began as BG Group confirmed speculation it was in talks with the company. It has since been confirmed that its board has backed an offer from Shell for a £47billion takeover. The companies have unveiled details of the merger in a statement to the London Stock exchange.
Royal Dutch Shell Plc is set to acquire BG Group Plc in what would be the largest energy deal this year, according to a person with knowledge of the matter. Buying BG would be Shell’s largest acquisition since the 40.7 billion-pound ($60.3 billion) merger of its Dutch and UK parent companies in 2005, according to data compiled. It would unite the UK’s first- and third-largest natural gas producers.
Arctic-drilling protesters from Greenpeace climbed aboard a Royal Dutch Shell Plc oil rig Monday as it was transported across the Pacific Ocean northwest of Hawaii. Six Greenpeace members approached the rig, the Polar Pioneer, in inflatable boats and scaled the platform, according to a statement from the group. The Transocean Ltd.-owned rig is being sent on a vessel called the Blue Marlin to Seattle before heading to the Arctic, according to Greenpeace.
Shell has a new boss at the helm of its UK North Sea business after Glen Cayley, who was the oil and gas giant’s upstream director for the region, left to join the new Oil and Gas Authority (OGA). Paul Goodfellow took over as Shell’s upstream vice-president for the UK and Ireland last month in a low-profile change. One of his first tasks was to oversee last week’s announcement of 250 job cuts and changes to offshore shift patterns. Mr Goodfellow was previously unconventionals vice-president, US and Canada, for Shell’s upstream business in the Americas. Before that, he was onshore development vice-president in the Americas upstream operations, with responsibility for field development planning, technical and technology functions.
Oil giant Shell has moved one step closer to oil and gas exploration in the Arctic after the US Interior Department upheld a lease sale from 2008. In 2012 the company had suffered a number of mishaps in the region. Now the Interior’s Bureau of Ocean Energy Management will consider Shell’s exploration plan and perform an environmental assessment on it. The assessment is expected to take at least 30 days to complete.
Shell has delayed drilling of a $100million-plus exploration well off Australia’s north-west coast. The Shell Cronus-1 well had been due to start drilling in the Browse Basin but has been delayed until later in the year. It comes after a number of wells were also deferred including Japan’s Inpex Corporation and Santos, while a number of other companies have sought modifications to terms.
Helix Energy Solutions Group and oil major Shell have signed a multi-year contract to provide well intervention services in the Gulf of Mexico. The agreement will utilise Helix's deepwater well intervention semi-submersible, the 04000. It has already been performing work for Shell since 2011 under a Master Service Agreement.
The Libra consortium has confirmed the presence of a hydrocarbon column approximately 200 metres deep in reservoirs 220km offshore from the city of Rio de Janeiro. Informally known as C1, the well is located in the Santos Basin.
Oil major Shell will reduce the number of staff and agency contractors working on its North Sea operations by 250. The company said it would be making a number of changes to both staffing numbers and shift patterns. It is not yet clear how many staff and contractors specifically will be affected.
Shell has completed the sale of its OML (Oil Mining Lease) 29 and the Nembe Creek Trunk Line (NCTL) in the Eastern Niger Delta for $1.7billion. The subsidiary, the Shell Petroleum Development Company of Nigeria, said its interests have been assigned to Aiteo Eastern E&P company limited. The divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the federal government of Nigeria’s aim of developing the country’s upstream oil and gas business.
Oil major Shell could soon be allowed to drill for oil in the Arctic. A decision on whether to grant permission will be made by the US Department of Interior Secretary Sally Jewell later this week. If approved, the company would be able to drill in the Chukchi and Beaufort seas of the Arctic near Alaska.
Oil major Shell has completed the sale of its stake in a Nigerian oil field for $737million. The company is nearing the completion of a strategic asset review in the West African country.
Shell is looking for a buyer for its Frederica Refinery in Denmark. The oil major has also agreed to sell both its retail and commercial fuel marketing operations in Denmark to Couche-Tard.
Shell boss Ben van Beurden received a pay package worth a total of £19.5million in 2014, the oil and gas giant's latest annual report shows. The figure includes a £1.4million salary, a £3.3million bonus, £10.7million pension top-up and various other benefits.
Pemex Exploracion y Produccion can’t recover hundreds of millions of dollars lost on Mexican condensate smuggled across the Texas border by bandits and sold to Shell Chemical LP, ConocoPhillips Co., BASF Corp. and other buyers that didn’t know the feedstock was stolen, a federal appeals court ruled. A Houston federal judge threw out the claims last year after finding Mexico’s national oil company waited too long to pursue US buyers of its stolen natural gas liquids, after it failed to halt the thefts on its side of the border.